Now blockchain is making major inroads into social media. The timing is interesting given the recent drops in share prices of Facebook and Twitter in late July. These price drops share a common component across the social media landscape: moderating these feeds becomes very expensive as they scale up. Both companies are finding out just how expensive, as they hire hundreds of engineers in an effort to thwart purveyors of fake news and web-crawling bots. In fact, removing many of these ended up lowering overall user counts at both platforms recently, even as costs to manage the effort soared.

In a recent article on a jobsite called AngelList Weekly, the editors point out an innovative solution to the problem: give the users power to self-moderate. They do this by offering decentralized platforms that often use the more secure blockchain technology.

One, called Steemit now boasts 800,000 users, and while that may pale in comparison to Facebook’s 2 billion plus, it has an interesting twist. It uses “upvotes” which are tokens that hold real market value, so users, not advertisers, are rewarded for engagement.

Another, called Sapien, built on the popular Etherium blockchain, has thousands of users and features “a global reputation system, a reward system for users, and a marketplace for creators.”

An open source alternative to Twitter with close to 200,000 users claims to “put social media back in your hands” with no ads and no ‘algorithmic feeds’ and runs on community-owned and operated servers.

All of them, while small today, have a common perspective: that centrally moderated sites like Facebook, Twitter and others are “unfair or inconsistent.” And while Facebook and Twitter aren’t going away, these sites and others like them are growing fast – on blockchains.

The idea of secure, private networks in which all transactions on a system are visible to all users provides a welcome sense of ‘ownership’ when contrasted with the controlled environments that are moderated in the huge cloud-based servers owned by the social giants. In a way, it represents a return of the internet and social media to their more decentralized and less monetized roots.

It may be too late for these companies to displace Twitter and Facebook, but their scope and their downstream influence on others is bound to grow. It’s a trend worth watching.

Assuming you’ve digested our prior post on blockchain basics and its importance in creating secure transactions, we’ll look now in this second post at some applications that are aimed at proving blockchain’s value to users everywhere

We noted earlier that blockchain provides secure digitally-signed access to transactions to all members of the chain. The data is distributed across a network of servers rather than just a single server, thus making it transparent, immutable and secure for reasons touted earlier. So then, what can we do with this new framework that will make a difference in our own lives? Let’s look at a few examples, as provided in a recent article by Nir Ksahetri, a business professor at the Univ. of North Carolina, in a recent article in The Wall Street Journal.

Let’s start with distribution. A number of companies including Cisco Systems, Bosch and Bank of New York Mellon have banded together to create a blockchain-based IoT security standard, to bind together weaker IoT identities like serial numbers, barcodes, UPCs and QR codes into stronger crypto-graphic entities. Widespread use would allow device makers to securely distribute updates and patches, even if a device is moved or sold (since all that information would be part of the blockchain transaction record). Manufacturers can be sure they’re communicating with the right dev ice.

In health care and banking, providers today store your personal information and we as consumers have little control over who sees it or shares it. With blockchain, entire medical records or banking records can be stored in encrypted ledgers with the patient’s private-key. Changes to the record can be communicated via public keys and providers with permission can see the data with patient or customer authorization and permission, but they can’t store it.

In developing countries, land fraud due to administrative corruption is a problem. Corrupt officials alter property records to benefit themselves in exchange for bribes, creating land fraud. With blockchain, if a property changes ownership, the transaction record reflects time, location, price and parties involved. Government agencies can authenticate the title information when entered, and law enforcement agencies can inspect documents to enforce compliance with “know-your-customer” and anti-money laundering policies. Blockchain of course also protects against unauthorized access to data and the owner controls the ultimate (private-key) record.

All these applications, and many more, are being (or have been) developed utilizing blockchain technology, and we’re only at the beginning. While challenges loom, like bringing down costs at the IoT and labeling level, creating wider user-community acceptance and providing better communication to decision makers of blockchain’s many benefits, it’s all coming. Already nearly four in ten companies (of 369) surveyed a year ago by the Journal were deploying or considering deployment of blockchain technology. It’s only a matter of time.

Among the most promising of new technologies, yet one that most people know virtually nothing about, is blockchain. And yet, it’s going to be very important – already is, some argue – to commerce around the world. One key reason is the very thing that most computer users lately have come to fear the most: security. Security is getting harder these days, not easier, and blockchain may well be the answer.

If you’ve heard about blockchain at all, it probably has something to do with bitcoin or other so-called cryptocurrencies, a new mode of currency that is in fact built on top of a blockchain, but which are at best a distraction from blockchain’s real value and importance. Ignore all the bitcoin hype and naysayers might still argue that blockchain is just another way of doing computerized accounting. Fair enough. But the technology is so much more important than even that. And its success could revolutionize the world of computer security, one that ultimately affects all of us as users.

Fair to say, blockchain is deserving of your attention if you work in the world of business, information technology, or are just a day to day user of modern technology – which adds up to most of us.

What is blockchain? Simply put, it’s a digital record of transactions that are stored on multiple servers around the world. It could be hundreds of computers, thousands, or even millions. Because of blockchain’s method of distributing data over a network, it doesn’t carry the weight and responsibility of trying to store (and secure) all that data on a single server. That means that it cannot be easily tampered with, hacked or disturbed. Post a record of a transaction on a blockchain, and it’s there for all the world to see, safely encrypted no less, but visible to all with rights to see it, rendering it virtually impossible to alter or falsify the record.

Blockchains use secure digital signatures to verify a user’s identity. Users validate transactions through a private key when a user creates an account. A private key is a very long, random and virtually impossible-to-hack alphanumeric code known only to the person who controls the record. Other users can then have access to public keys created from those private keys to share selected (allowed) information. So a common example is a bitcoin ‘wallet’ where others can send bitcoin payments (using a public key) but only the person with the private key can spend the bitcoin.

Notably, this blockchain security has never been hacked. (Bitcoin exchanges have been hacked, but the underlying blockchain has never been hacked.)

As Nir Kshetri, professor of business at the Univ. of No. Carolina points out, “Blockchain’s key features – decentralizations, immutability and cryptography-based authentication – are what make it such a powerful cybersecurity tool. A user’s identity cannot be forged because only he or she has the private-key proof of identity. Third parties can be given limited access to records, while blockchain’s built-in audit trail means there is complete documentation of the creation, modification and deletion of records.”

This has very real and powerful implications to applications ranging from simple barcoding to the Internet of Things in the world’s supply chains, and in realms ranging from the storing of your personal medical records to the elimination of land transaction fraud in Africa.

We’ll take a look at how blockchain can bring secure access to a whole new world of applications like these in our follow-up post. Stay tuned…

We’ve written several times here about the importance of the new technology called blockchain. (If you missed those try here for a two-parter outlining the importance of blockchain to supply chains, as well as here for a quick primer blockchain, and finally here for a quick take on blockchain’s benefits to the supply chain.)

Today, we’ll take a very quick look at 3 obvious ways that the folks at ERP consultant Panorama Consulting see blockchain affecting life in the supply chain, in an article found here.

Blockchain allows for streamlining secure transactions between logistics suppliers, manufacturers and third-party partners. Blockchain as we’ve noted is a secure ledger consisting of encrypted transactions that appears the same to every member of the chain. It lives on multiple computer – not just a single one – where all members have an equal view of all its records, permanently. (For the record, a blockchain has never been hacked, for this reason.) Thus, all members of the supply chain from source to user see the same record of the data. Imagine the possibilities…

Blockchain makes everything traceable and enhances accountability. With every transaction visible to every party in the chain, blockchain essentially eliminates fraud, waste and duplication. Once data has been added to a chain, it cannot be deleted or altered – only amended, publicly. It promotes integrity of data, intrinsically.

Overall, blockchain makes most things easier. To quote Panorama’s paper directly: “When it comes to the supply chain market, the use of blockchain simplifies almost everything. It virtually eliminates fraud and reduces errors. Additionally, it becomes much easier to manage inventory, improve partner and consumer trust and identify and fix any potential problems. Courier and payment costs are reduced, and the need for paperwork is eliminated. Finally, the long process of reconciling and auditing separate ledgers from different entities in the supply chain is eliminated.”

You’ll continue to hear and read about blockchain, both here and elsewhere, in the months and years ahead. It’s a topic worth paying attention to for anyone involved in the world of business, transactions and supply chains. Which in the ends means, pretty much all of us.

We noted in our prior post that underlying the cryptocurrency called “bitcoin” is what, in the long run, may be the more important element at play here: the blockchain. Our prior post quotes The Wall Street Journal’s Christopher Mims’ fine explanation of the concept. Now we’ll look at some important applications of blockchain technology.

In logistics, Walmart already uses a blockchain to list for sale over a million items, including chicken and almond milk, that provides its supply chain with traceability all the way forward and backward from source to sale.

Both efforts are expanding rapidly, and other companies cited by Mims include Kroger, Nestle,Tyson Foods and Unilever.

A company called Everledger was started in 2014 with the intent of creating a blockchain that traces every certified diamond in the world. It already has over 2 million diamonds in its registry, and adds another million or so per year. Everledger records 40 measures of each stone, lending it traceability “from when it’s pulled from the earth to the day it’s purchased by a consumer.” Every participant in that chain from miner to retailer maintains a node with a copy of the database in the blockchain.

A company in Israel puts internet-connected sensors on pallets and uses business intelligence analytics to determine when and where items could be damaged. Blockchain participants can record every stage of the package’s journey via package, pallet and shipping container.

Even whole countries are adopting blockchain. Dubai intends to be “the first blockchain powered government in the world by 2020.” By moving its central record of all real estate transactions onto a blockchain, it will be faster and easier to transfer property titles, for example.

As blockchain technology becomes more widely accepted and integrated into supply chains, it has the potential, as Mims notes, to be a “fundamental enabling technology,” similar to how new data transmission standards across networks made the internet we know today possible. It could one day underlie everything from “how we vote to whom we connect with online to what we buy.”

That being said, it’s wise to recognize that the current bitcoin craze is merely one application of the blockchain technology. Clearly, much more will be, and is, possible through blockchain. Bitcoin may — or may not — be here to stay; but blockchain seems to have all the merits and rapid adoption of a technological foundation that could change the way businesses run.

With all the hype surrounding bitcoin these days making it sound more and more like a modern-day equivalent of the 17th century tulip bulb mania, it’s important to remember that there actually is something important going on here. And it’s not about the bitcoin. It’s about the underlying technology for bitcoin – the blockchain.

Investment manias may come and go, and bitcoin will likely make some folks rich (it already has for those who bought bitcoin at the start of 2017 at $963 and watched its price soar to nearly $20,000 by year-end; it’s since fallen back to around $8,300 as of this writing), and likely leave some ‘greater fools’ broke a little further down the line. After all, bitcoin has no intrinsic value, it’s not based economically on anything, and its essential value is merely the result of what some other person is willing to pay for it. As a currency proxy, it has a ways to go.

But the blockchain that bitcoin is built upon – that’s another thing. And a recent article by Christopher Mims in The Wall Street Journal provides some of the best explanation we’ve seen for why it matters.

What is a blockchain? As Mims explains:

“It’s essentially a secure database, or ledger, spread across multiple computers. Everyone has the same record of all transactions, so tampering with one instance of it is pointless.”

He goes on to explain that the underlying cryptography…

“…allows agents to securely interact – transfer assets, for example – while guaranteeing that once a transaction has been made the blockchain remains at immutable record of it.”

Blockchain has the power to transform industries for three reasons, notes Mims.

First, it’s well-suited to transactions that require trust and a permanent record.

Second, blockchain requires the cooperation of many different third parties.

And third is… the hype. “The excitement around cryptocurrency gives blockchain the visibility to attract developers and encourage adoption.” In this way, blockchain resembles the cloud, which also gave many industries “new business processes, disruptive startups and new divisions within existing companies, an ecosystem of supporting technologies, and new ways to charge for services.”

We’ll take a look at some of that disruption in our concluding post, so stay tuned.

We hear a lot these days about blockchains, usually as the underlying technology for something called “bitcoin,” touted as a new virtual currency. There’s a lot of talk about bitcoin being a future form of currency that might circumvent banks, governments and other authorities. But bitcoin and blockchain are not at all the same, and should not be confused.

Bitcoin isn’t really a currency at all. It’s more of a currency store. Think of gold: it has value to holders, and acts as a sort of benchmark, but while it’s a store of wealth, it is not in itself a currency. Same with bitcoin; it has no intrinsic value. Unlike a stock, a bond, or a piece of real estate, it’s not a claim on future earnings to which a valuation could be attached. In fact, most people need to convert bitcoin into cash just to use it, and it’s most commonly ‘valued’ against a real currency — the dollar.

Moreover, as the recent climbs and dives of bitcoin’s value have shown, it’s not even much of an investment in the traditional sense of the word. It’s more of a gamble, actually. It’s paid off nicely for some, but those playing in bitcoin are best advised to use some money they can afford to lose. In fact, a couple legitimate bitcoin exchanges have arisen lately, and they require investors to have sizable assets, and minimum bitcoin investments of around half a million dollars.

So, separating bitcoin from blockchain, we look at the underpinning of bitcoin, the blockchain in which we think lies something worth paying attention to.

Blockchains are part of a digital ledger, a database essentially, allowing for the creation and sharing of a large number of transactions while avoiding error or fraud – not to mention middlemen (i.e., banks). There is no centralized administrator. They work via a decentralized, anonymous, open structure, backed with strong cryptography to ensure the accuracy of each transaction.

A blockchain has three components: a transaction; a record of that transaction; and a database in which that transaction is permanently and securely verified and stored. Once stored, a record cannot easily be undone, because altering that record retroactively affects all other blocks in the network. Any change to a record, say someone trying to forge or delete a record, would appear as an irregularity to all others in the network, and the new data would be rejected. It’s basically trust without having to trust any person.

Recently, an article in APICS Magazine describing blockchain in logistics described the nature of the transaction quite neatly, as follows:

A transaction is requested…

The transaction is broadcast to a network of computer known as nodes…

The network of nodes validates the transaction using known algorithms any use can see…

The verified transaction is combined with others to create a new block of data for the ledger…

The new block is added to the existing blockchain in a way that is permanent and unalterable…

And the transaction is complete.

In short, blockchains are useful in generating a less expensive but reliable way to know the status of any transaction in the system. And as APICS notes, “anyone focused on making a process leaner will appreciate the value this brings.”

As you read more and more about bitcoin (and as we written about in the past), keep your eye on the underlying blockchain. Dollars to doughnuts, that will be the technology play that matters in the long run.